By Alicia Draus

Police charge local pharmacists with fraud

Jan 9, 2017 | 8:34 AM

MEDICINE HAT, AB — Three local pharmacists have been charged with fraud. According to the Medicine Hat Police Service, a year long investigation determined the total amount of the fraud that allegedly took place was $1.6 million.

Kathy Kieser, Evan King and Robert Stadnyk have all been charged with one count of fraud over $5,000.

The three are former employees of Medicine Hat Co-op where the alleged fraud took place.

According to documents posted to the Alberta College of Pharmacists web site, the three individuals negotiated drug purchases and vendor rebates or incentive payments, based on drugs supplied to the pharmacy from four generic drug manufacturers.

A hearing tribunal found that while the drug purchases and rebates or incentive payments were negotiated by the individuals, the drugs were purchased on behalf of Medicine Hat Co-op and paid for by the company.

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Documents show that much of the vendor rebates or incentive payments were provided to Kieser, King and Stadnyk for their own personal use in the form of gift cards, prepaid credit cards, travel vouchers, paid trips and entertainment expenses and tickets.

According to the hearing tribunal, the alleged offences took place between January 1, 2010 and December 31, 2014. King and Kieser co-managed the Co-op pharmacy From 2006 to 2015. In 2015, King moved to Saskatoon to work as a Pharmacy Operations Specialist for Federated Co-op Limited (FCL).

Pharmacy Operations and Marketing Manager for FCL, Joe Caroll, discovered the amounts of rebates and incentives recorded from Medicine Hat Co-op located at 10 Northlands Way NE  and submitted to FCL was noticeably lower than other pharmacies. 

Around the same time, the Canada Revenue Agency (CRA) also approached FCL for outstanding tax owed on the rebates in question. The CRA alleges the rebates and incentives were not declared as income by FCL. 

Caroll says he reported his concerns to the College of Pharmacists in November 2015.

King was terminated from his employment in October 2015. Kieser and Stadnyk were both terminated from The Medicine Hat Co-op a month later.

As a result of the hearing tribunal, all three individuals had their license suspended for two months. They were also  ordered to pay a fine of $5,000 to the Alberta College of Pharmacists and must disclose the decision of the hearing tribunal to any pharmacy employer for the next three years.

Medicine Hat Police began investigating the case in December 2015. All three have made their first court appearanceS. Stadnyk is scheduled to appear back in court on January 12, Kieser on January 25 and King on February 15.